Trust in Technology “There is one thing which, if removed, will destroy the most powerful government, the most successful business, the most thriving economy, the most influential leadership, the greatest friendship, the strongest character, the deepest love... That one thing is trust.”
Stephen M. R. Covey, The Speed of Trust
Contents
01 Foreword 03 Why we need to study the nature of trust 04 The state of trust in technology today 12 Love, lust and convenience 14 How security fears undermine trust 18 The case for robo-advisors 20 Trust at the outer limits of technology 24 H2M versus H2H: How machine interactions differ from human relationships 27 Conclusion: The path to high trust HSBC TRUST IN TECHNOLOGY
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Foreword
igital technology is The report explores some of rapidly changing the the top technology topics of the world. The number of moment, like artificial intelligence, mobile banking users biometrics, digital wallets and data is forecast to double driven nudge applications. Dbetween 2015 and 2019 to 1.8 billion, representing more than one quarter We will apply the insights this of the world’s population. As one research provides to our own of the world’s largest banking and business, as well as sharing them financial services organisations, broadly with the financial services serving more than 37 million industry and other stakeholders. customers across 70 markets, we need to anticipate and be ready to Digital demands vary from customer respond to that change. to customer and market to market, but the long-term direction is clear: Our Trust in Technology research customers should be able to bank explores public opinion about with us when they want, in the way the new technology banks and that they want. At HSBC, we want consumer-facing businesses are to apply proven digital technology to developing, and its impact on daily make our customers’ experiences lives. In this international study we simpler, better, faster and more examine people’s awareness and secure. We will continue to adapt understanding of new technologies as their needs change, to provide – their trust in them and the impact banking services on their terms. of this on adoption rates; and what people think the future looks like in terms of new innovation.
John Flint Global CEO, HSBC Retail Banking and Wealth Management
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Why we need to study the nature of trust
his is an age where the bodies called biometrics. Even the they can be trusted to behave in dreams of science fiction cadence of typing and swiping can be adverse conditions. are becoming a reality. The included in the security mix – a tactic This report is an exploration of list of new technologies known as behavioural analysis. the state of trust in technology. The being released is dazzling. Naturally, this deluge of new tech findings are supported by an exclusive TLife expectancy is hitting record is a challenge for users. There are survey of over 12,000 consumers highs thanks to ground-breaking new early adopters, keen to experiment across 11 major economies that looks processes. A team at Harvard Medical with each new product release. And at opinions on trust internationally. It School has grown heart tissue from behind them are more cautious users, reveals the level of trust in biometric adult skin cells. The prospect of waiting to see if a new technology security, the gap in attitude between transplant organs grown from scratch deserves their time and money. generations, and what we really feel is on the horizon. The speed of adoption is regulated about entrusting our lives to a robotic Artificial intelligence is going by a number of factors such as price intelligence. Qualitative research drills mainstream. The success of Amazon and availability, and an essential deeper into individual perspectives. Echo and Google Home smart component of trust. The more technology enters our speakers show there is an appetite No one buys anything unless they lives, the more critical the issue of for AI assistance in the home. trust it. Advertisers spend a fortune trust becomes. A FinTech startup can’t Autonomous cars are being test building trust, and designers work hard win customers without winning their driven. Sometime in the next decade to foster it. Without trust, a technology trust. A bank can’t keep customers it will be normal to be chauffeured can be ingenious and cheap, but will without being trusted. In order to by an AI. remain on the shelf untouched. deliver life enhancing new products Financial services are being re- The bedrock of trust is reliability. they need to know what trust is, and invented by new technology. Apps Will the product do what it says it will? how to win it. make it quick to send money and Security is a key concern. Stories The goal? The philosopher Onora check accounts. Online consultation of data leaks and unauthorised data O’Neill put it well: “The aim is to have services, nicknamed robo-advisors, sharing are all too familiar. There can more trust. Well frankly, I think that’s are bringing expert guidance on be no trust unless these worries are a stupid aim. It’s not what I would investment and pensions to a wider overcome. aim at. I would aim to have more audience. Security is becoming As artificial intelligence takes on trust in the trustworthy but not in the quicker, simpler, and more reliable more duties, the question gets a little untrustworthy. In fact, I aim positively through fingerprint, voice and iris trickier. For example, autonomous to try not to trust the untrustworthy.” scanning, a collection of technologies vehicles are close to launch, and This report offers some suggestions based on unique elements of people’s questions are being asked whether on how we reach that goal.n HSBC TRUST IN TECHNOLOGY
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The state of trust in technology today
echnology continues to This warmth extends to using develop at a rapid pace technology, with 76% saying they with faster, simpler and feel comfortable using new technology, more secure innovations and 80% saying they believe being launched on an technology makes their life easier. Talmost daily basis. But what is the Then respondents were asked public appetite for creative new about fields of emerging technology. tech? HSBC commissioned a survey The sunny outlook quickly fades. across 11 major international markets Artificial intelligence is a booming to understand how people trust in field, with engines such as IBM technology to manage their financial Watson and Wipro Holmes able to affairs and daily lives. diagnose cancer, analyse retail data, Our research shows a lack of trust and communicate through ordinary and understanding is holding back the spoken and written language. adoption of new technologies. However, AI is not yet trusted, The survey began by establishing a instead it struggles to win support. baseline of trust – how optimistic and Only 8% would trust a humanoid generous people tend to be in general. advisor programmed by experts to The results are positive. By default, offer mortgage advice, compared to there is a high level of social trust. 41% trusting a mortgage broker. For People give each other the benefit of context, 9% would be likely to use the doubt, with 68% saying they will a horoscope to guide investment trust a person until proved otherwise, choices, and 10% would be likely to be and 48% believe the majority of people influenced by the flip of a coin. are trustworthy compared to 20% Robotics is advancing through links who disagree. The outlook on life is to AI. How about allowing a robot to positive, with 65% confirming they are conduct a surgical operation? Only one always optimistic about their future, in seven (14%) would trust a humanoid and half saying “things that seem bad robot programmed by leading surgeons normally turn out okay in the end,” to conduct open heart surgery on triple those disagreeing. them, just five percentage points HSBC TRUST IN TECHNOLOGY
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ahead of the rather unnerving prospect technology is earned, not given. of a family member doing the operation Caution is the default. supported by a surgeon (9%). In-depth interviews conducted as Biometric security is another field part of this study looked deeper at with huge potential. It’s possible to the thinking behind trust. Consumers use fingerprint, voice, iris, and facial were interviewed across international patterns to confirm an identity. Security markets, and the results were then experts regard biometrics as a potential discussed by a panel of technology breakthrough in the fight against experts. identity theft. Trust in people produces However, trust is yet to be fully testimony brimming with emotion achieved in biometric technologies. and enthusiasm. An interviewee from Iris recognition is trusted by 26% to Hong Kong produced a photograph and replace alphanumeric passwords, a said, “My best friends since secondary combination of letters, symbols and school. I truly trust everyone of them numbers to confirm their identity and due to our deep bonds. Though we’re in prevent unauthorised access, with different universities and experiencing voice recognition and facial recognition different university life, we are also the both trusted by 18%. best listeners to each other and truly Even quite straightforward consider each other as brothers.” technology is regarded with scepticism By contrast, trust in machines under certain circumstances. For was expressed as transactional. example, skydivers are usually Performance is what matters. A equipped with an automatic failsafe Chinese interviewee expressed their triggered by an altimeter. But when logic on what to trust: “It [Trust] is asked what they’d trust to open a being sure that the thing will not fail parachute on a skydive, 65% opted for or disappoint you with its quality, “an instructor with me”, 53% trusted operation and/or handling. Being sure themselves to pull the rip-cord, and that it will do what you expect it to.” 16% would trust a pre-programmed Will Highams, a cultural trends release mechanism. expert, reviewed the qualitative responses, and says, “Technology can Winning and breaking trust build trust on one level. If you create The results reveal a fundamental something useful, that is seamless, tenet of trust in technology. Unlike that does things well and I can rely on people – who we trust until given it then that is brilliant. But the other cause to think otherwise – trust in form of trust is a human relationship
Who would you trust to perform surgery?
A surgeon with at least 10 years’ experience 83%
Remote control robot controlled by an experienced surgeon 28%
A humanoid robot that has been programmed by leading surgeons 14%
A family member supervised by a surgeon 9%
A friend supervised by a surgeon 6%
None of the above 6% HSBC TRUST IN TECHNOLOGY
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I’ve never heard of What do you trust to this technology replace passwords?
Blockchain 59% Voice recognition Fingerprint Chatbots for customer recognition Numerical 6% service/advice PIN 46% 23% 22% Robo-advisors using Fingerprint AI algorithms recognition Numerical Finance programmes Iris 46% PIN 41% over social media recognition 22% Iris 33% recognition 26% Digital 26% wallets 14%
which is a different form of trust.” new concepts to market, hence the The principle that trust in widespread expectation for this record technology is built over time, based on to continue. When asked whether hard evidence, explains the hesitancy artificial intelligence based services around new products and services. were already available or would be Chatbots, AI and biometrics are available in the next five years, 88% developing fast, and are yet to prove expected to see AI involved in nudging functional reliability to doubters. financial behaviour, and 59% expected Many consumers are still unaware virtual reality bank consultations. The that emerging technologies even exist. integration of bank accounts with More familiar concepts generate social media will soon be a common higher levels of trust. This is offering, said respondents: 88% Trust in technology is highlighted by perceptions of expect to see it arrive within five years. earned, not given. fingerprint technology. Fingerprint Current attitudes to emerging Caution is the default. identification has more than a century technologies should therefore be taken of use by police forces. It is a familiar with caution. Trust can be won as each method of identification. Fingerprint technology becomes part of normal recognition is already used by 21% of life and develops a track record. respondents to identify themselves Businesses can help this process internationally, rising to 40% of by raising awareness and educating respondents in China and 31% in consumers. India. The status of the technology On balance, consumers are reflects this familiarity, with 46% confident that innovation is moving in overall saying they trust a fingerprint the right direction: two-thirds (67%) to replace passwords. Financial believe advances in technology will services companies will need to cater make the world a better place. to this demand: 38% said they regard fingerprint login as a very important or The optimism of the East essential service for their bank to offer. Attitudes to technology vary from Consumers are also familiar with nation to nation, and the survey reveals the track record of innovators to bring the key factors. Openness is correlated HSBC TRUST IN TECHNOLOGY
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to social and economic change, with the lowest general sense of trust, with rapidly developing markets in the East 28 per cent of respondents believing far more experimental with innovation the majority of people are trustworthy, than in the leading mature economies more than half the level in Canada of the West. and the UK. The spirit of Rousseau China and India are the most lives on. In China, 89% believe that open to new technologies. France advances in technology will make the and Germany are the most cautious world a better place, the highest, and Trust can be won as each of the 11 nations surveyed. For 70% think the majority of people are technology becomes part of example, 41% of Chinese and Indian trustworthy. normal life and develops a respondents said they were “likely The research sheds light on why track record. Businesses can or very likely” to trust a hologram trust in Western societies is lower help this process by raising assistant to help them make choices than in the East. awareness and educations around their money or investments. In A Canadian interviewee explained consumers. France and Germany the figure is 7%. their reticence to trust corporations: France stands out as the most “It’s hard to trust blindly these days, reluctant of the 11 nations polled to especially with technology and embrace new technology. In 18th companies. You hear about trust Century France the philosopher Jean- being violated all the time-personal Jacques Rousseau became famous for information being compromised, his view that science and the arts had shared, hacked, and breached. corrupted mankind. In France today Giving trust to companies is a big the belief that technology will make leap these days.” the world a better place is held by An interviewee from Mexico 41% of respondents, by far the lowest explored one of the causes – repeated of the 11 nations surveyed. It also has breaches of trust: “I’ve had my trust
Over two thirds of people are positive about technological advances
56% 62% 62%
67% 41% 89%
70% 74% 85% 70%
67%
Average 67% HSBC TRUST IN TECHNOLOGY
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Who do you trust to keep you safe?
UK Canada
broken many times when buying experiment, matches what we know products and services that promise about the societal trends in those two something specific, and then when nations: “In India or China [there are] you have them in your hands and humongous movements of people operate them, it is all just marketing.” from working class to middle class The vocabulary of participants and suddenly people have wealth and illustrates the mindset in Western are getting educated. Some people countries. There has been an are seeing all these things as a ticket erosion of trust combined with an or a passport to something new and empowerment in technology. The they’re jumping on it, they’re grabbing In Western countries there result is greater self-reliance. it with both hands and saying, ‘We has been an erosion of The East is more optimistic. totally want this’.” trust combined with an There is greater trust in traditional This sense of adventure is matched empowerment in technology. institutions in nations such as China by a hunger for new products. In The result is greater and Singapore. A Chinese participant China 61% believe we will use only self-reliance. said, “Under the leadership of the biometrics to access banking services Chinese government, China’s position in the next ten years, compared to in the world is rising; our living 43% in Germany. standards are rising. Therefore I give Lead researcher Tom Anderson the Chinese government a high degree saw the East-West divide again and of trust.” again in the interviews: “We asked Chris Gledhill, a FinTech people to imagine the future of commentator and founder of social- personal finance. The most extreme networking app Secco, was one of example we had was a woman in the expert reviewers of the qualitative India who said she hoped by 2030 if research. He says the mood of she went into a shop the shop would participants in India and China, recognise her through her DNA. If expressing eagerness for creative she left the shop she wouldn’t have new technologies and a willingness to to do a transaction, the shop would HSBC TRUST IN TECHNOLOGY
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automatically debit her account. We likely to want video conferencing had somebody in the UK says it’s 2030 with a human advisor (30% vs 17%) and they have raised the contactless and integration with social media limit to £30!” (28% vs 13%). And they are better informed – being twice as likely Age is a poor predictor of to know about fingerprint logins, tech adoption and twice as likely to know about Generational differences were tracked. voice recognition. All generations worry about It is often assumed that younger But the reality is different. There similar events. The three age people will be more tech savvy than is little difference in habits across cohorts are, with margin of older generations. That, it seems, is generations. Online banking is used error, similarly likely to worry not quite the whole picture. identically by all three age bands - about personal data being The survey compares Millennials around 67% on average across the leaked, credit card cloning (born after 1981), to Generation X, age bands bank online. There is also and identity theft. This puts to and the generation born in the two roughly equal use of P2P payments bed the idea that older people decades after 1945, known in America such as PayPal (averaging 33%). are particularly nervous as the Baby Boomers owing to the And millennials are visiting bank about technology. huge post-WW2 surge in births. branches to manage money – 37% The youngest cohort certainly do, only slightly less than Baby regards itself as more adept, with Boomers at 47%. 52% saying they are usually “the first All generations worry about to try new things”, compared to 39% similar events. The three age cohorts of Generation X, and 27% of Baby are, with margin of error, similarly Boomers. The younger generation is likely to worry about personal data more vocal in calling for innovation: being leaked (56% on average), credit 43% believe fingerprint logins are very card cloning (54%) and identity theft important or essential as an offering (50%). This puts to bed the idea that from their bank, compared to 29% of older people are particularly nervous the Baby Boomers. They are twice as about technology.
Common concerns in day to day life % that are concerned or very concerned about these issues
Milennial Generation X Baby Boomer 57 57
56 Biggest differentiation 55 55 54 54 54 53 52 51 51 50 50 48 47 46 45 45 44 43 43 39 38 38 34 34 33 28 27
Personal Bank Debit or Getting Identity My house Email Being Buying Being lied data being account credit card a serious theft being broken scams taking mugged something to by a close leaked hacking cloning illness into money faulty or family member fake or friend HSBC TRUST IN TECHNOLOGY
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How financial services organisations should react My bank is good enough for The principle of withholding trust in technology until confidence is won what I need it for is highlighted in the finance sector. Caution is amplified when money is at stake. The priorities are stability and United States 83% rigour. The attractions of new FinTech services rate below these mandatory UK 81% factors. Just 16% of respondents said Hong Kong seeing a rival bank with better 56% technology would cause them to lose Canada 81% trust and switch, although the number France 70% leaps in markets such as the UAE (29%) and India (32%). Old fashioned complaints are far more likely to trigger a switch of bank. Mexico India Being hacked into and having money 71% 77% stolen (52%), and finding out the bank does not have the customers best interest at heart (36%), are more popular reasons to switch. Singapore Germany Consumer priorities are basic. 71% 75% Banks need to keep money safe, with 87% calling this as very important China UAE 73% 74% or essential, and the same number demand security of personal data. Banks are conservative adopters of technology, and consumers appreciate that prudence. There’s a view that banks are not the right organisations chart above shows, consumers in the to experiment – 61% agree that banks West are at ease with the technology should only use new technology which employed by their bank. Travel East has been tried and tested elsewhere. and consumers are experimenting Regulation plays a role in guaranteeing with new services. In India consumers consumer faith in banks when send payments via WhatsApp. In China introducing new technology, with 75% new payment services such as Alipay saying it is essential or very important and platforms such as WeChat have that new technology is independently changed the market. Kevin Martin, regulated for security. Head of RBWM, HSBC Asia-Pacific, Caution is amplified when That said, there is a clear has seen this first hand: “China’s money is at stake. The opportunity. There is phenomenal consumers are years ahead of their priorities are stability trust in financial institutions. They are counterparts in many developed and rigour. seen as cautious, knowledgeable, and economies in terms of how they ship extremely good at keeping data private. and pay for what they buy.” These are big assets. The implication is that Western For example, the vast majority of consumers are underwhelmed, respondents say they are happy to possibly underserved, with the level of share personal details with their bank innovation offered to them. if it meant receiving a better banking It is also clear there can be better service, with only 16% refusing to do communication with consumers, so. By contrast 57% would withhold particularly to educate them about personal information from social media new services like robo-advice and platforms such as Facebook and biometrics. Awareness is low. Instagram – triple the rate. That’s a Above all, financial services providers decisive win on trust for banks. can challenge the nature of the There could be more room for relationship with consumers. the finance sector to roll-out clever An interviewee in the UAE captured new services in the West. As the a common view of the current HSBC TRUST IN TECHNOLOGY
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situation: “I don’t really feel a personal me algorithms that show me my relationship with my bank. I don’t credit worthiness. Why isn’t the app feel that they are reaching out to try permanently calculating my credit to help me a bit more. They only worthiness for me, and giving me tips call me [with] offers, meaning life and advice on how to improve it, so I insurance et cetera.” can have a lower loan?” A Chinese interviewee said, Financial services providers are “There is a purely monetary relationship alive to the opportunity. “People’s Consumers are eager to see between me and my bank, that is to personal lives are being transformed new services. However, trust say I use the bank as a savings vehicle by digitalisation, but in their corporate in technology takes time. and it is not involved in any other lives expectations have been lower,” Reliability must be proven. aspects of my life.” says Niall Cameron, Global Head of There may be an opportunity to Corporate & Institutional Digital at change this. Converting the assets HSBC, “We’re now seeing that mindset identified in this study – trust, start to change. People are saying, if I competence, high level of data privacy, can use an app to order and track a taxi, faith in the ability to innovate – can be why can’t I have that level of ease with used to roll-out helpful new services. my transaction banking, or my treasury Julian Ranger, a technology and management?” privacy expert, says the equation is Consumers are eager to see new favourable to finance organisations, if services. However, trust in technology they take the initiative: “What they’ve takes time. Reliability must be proven. got to do is trade on the trust that I’ve Users need to understand how a got in the apps to ask me for data to technology works, and what the allow me to have richer, deeper life downsides are. When that is achieved, engagement. Give me advice. Give trust is granted and adoption can soar.n
I find the technology I am offered overwhelming
UK Canada France Germany Mexico Hong Kong Singapore USA China UAE India
7% 7% 10% 13% 15% 16% 18% 18% 24% 40% 44% HSBC TRUST IN TECHNOLOGY
12 24% don’t understand or have not heard of voice recognition technology
Byte-size Trust in biometrics tripled after a simple explanation discoveries 69% have not heard What the Trust in Technology survey of robo-advisors tells us – at a glance 80% don’t understand blockchain
68% will trust someone until proven otherwise THE NEED FOR But only half (48%) believe EDUCATION most people are trustworthy
65% say they are always optimistic about the future
OLDS 39% 1 HUMAN AR 8-34 YE YE 5+ ALE 49% F AR 5 M EM O TO HUMAN 1% AL L 7% 5 E D TRUST 1 S
26% would trust iris S D recognition to replace L O 1 passwords R 12,019
A
E
Y
PEOPLE
4
5 -
70% rely on traditional 5 3
passwords1
% 4
4 11 21% use fingerprint SECURITY COUNTRIES recognition
6% use voice recognition
THE ADOPTION OF NEW TECH THE PERSISTENCE OF OLD China (44%) and India (38%) most TECH predisposed towards financial advice from computers
39% of people in India China #1 in fingerprint technology own a pager adoption (40% now use it)
Mexico has the biggest use of non-smartphones (43% use one daily) 1. Alphanumeric passwords HSBC TRUST IN TECHNOLOGY
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Men think they are the first to adopt technology but they are the biggest users of PCs, landlines and pagers
Women are the biggest users of wearables, apps, and tablets
Twice as many men as women own a smartphone but have never used it 80% believe technology makes their lives easier MEN AND WOMEN 74% feel comfortable using new technology
84% would share personal data with their bank if it meant better service
HUMAN TO MACHINE “Would you trust a robot2 to...” TRUST
…give mortgage advice 11%
…open your parachute 20% Use of fingerprint technology …conduct open-heart surgery 40% China 14% 31% India 25% UAE …set you up on a date 14% Canada 11% 9% France …open a savings account EAST 9% Germany 7% BEATS WEST In China and India, 41% are likely to trust a hologram assistant to help make money or investment choices versus 7% in France and Germany
Germany has the lowest adoption of smartphone banking (4%)
50% of people own a fax in Germany MONEY 50% of people own a fax in China
Most common banking channels are: Online ATMs Branch 67% 55% 41%
16% would change their bank if offered better technology
87% believe the security of data is as important as the security of money 2. Humanoid robot programmed by experts HSBC TRUST IN TECHNOLOGY
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Love, lust, and convenience
common assumption in the term institutions for whom we have from the company. Facebook I trust theory of trust is that you modest levels of trust are necessary because of the number of times I have either have it or you don’t. features in our lives – there’s a used it.” This reductionist approach quadrant to reflect those values. Some There are other ways to deepen ignores the different services we use also to achieve a trust. Tom Bailey, the technology Aintensities of trust. Love for humans functional goal, but we take them to editor of Shortlist magazine in the tends to be deep. Emotion pulls us heart a little more. Search engines and UK, says, “When you think about together, and when trust breaks the online shops are functional in this way today’s technology, things like washing consequences are painful. – we rely on them, and trust them to machines, microwaves, coffee Human trust can trigger heart work, but we might abandon them if machines; most people understand warming and colourful responses. One something better came alone. how they work and so that removes of our interviewees was asked about Then there’s the zone of frivolity – one of the major barriers for trust. trust and answered: “Trust is one of lust. Startups with unproven business Whereas when it comes to things like the most important elements in our models might catch our eye for a robots and driverless cars the average life that link us to one another. Without moment. Lust is shallow and short person’s not going to understand them trust, there will be no friendships. term. Buying a new gadget can at all so that is going to make trust very There will be no relationships. We will feel like a quick fling – exciting, and difficult, I think.” end up being alone. When there is experimental. It is possible to break into the love trust, everything is like rainbow.” In Asia there is more trust in quadrant. The “fanboi” phenomenon By contrast, trust in machines institutions and the government. in smartphones is enduring. Fans take is functional. It lasts so long as the Trust in financial institutions is shallow their chosen manufacturer to heart as device or service delivers a result. An by comparison. Naturally, families sit much as a football team. interviewee in Hong Kong said that, tightly in the top left, loved and trusted Currently only humans sit in the “To trust something means to believe now and forever. love zone. It’s possible to move a something that is true or correct or The goal for any innovative brand brand closer. The key is to foster the reliable that you can rely on it. Like is to move out of the lust zone same “human” elements such as my mobile phone or the lock of by building deeper levels of trust. compassion, understanding, integrity, my house.” Long term use by customers can and safety. The different types of trust can be achieve this. A Canadian interviewee Financial AI that delivers some mapped against time and depth. expressed their personal experience: artificial humanity will be able to Where trust is deep and long-term “I have been using PayPal for a deliver genuine benefits to consumers, there is love. Family members and very long time, and I really enjoy the deepen relationships, and build trust close friends are in this quadrant. Long- convenience and constant support over the long term.n LOVE DEEP FUNCTIONAL
FAMILY & FRIENDS EXPERTS (e.g. doctors etc)
OBJECTS (e.g. cars,
WEBSITES smartphones) TEMPORARY (e.g. Facebook, WeChat, Amazon)
GOVERNMENT LONG TERM WORK
FINANCIAL INSTITUTIONS START-UPS NEW TECH
NECESSARY SHALLOW LUST
HSBC TRUST IN TECHNOLOGY
DEEP LOVE 15 FUNCTIONAL
FAMILY & FRIENDS EXPERTS The West (e.g. doctors etc) DEEP LOVE OBJECTS FUNCTIONAL (e.g. cars,
WEBSITES smartphones) TEMPORARY (e.g. Facebook, WeChat, FAMILY & Amazon) FRIENDS EXPERTS (e.g. doctors GOVERNMENT etc) LONG TERM WORK OBJECTS (e.g. cars, WEBSITES smartphones) TEMPORARY (e.g. Facebook, WeChat, Amazon) FINANCIAL INSTITUTIONS START-UPS NEW TECH LONG TERM
NECESSARY WORK SHALLOW LUST
FINANCIAL INSTITUTIONS START-UPS GOVERNMENT NEW TECH
NECESSARY SHALLOW LUST
AsiaLOVE DEEP FUNCTIONAL
DEEP LOVEFAMILY & FUNCTIONAL FRIENDS EXPERTS (e.g. doctors etc) LOVE DEEP FUNCTIONAL FAMILY & OBJECTS FRIENDS EXPERTS (e.g. cars, (e.g. doctorsWEBSITES smartphones) TEMPORARY etc)(e.g. Facebook, WeChat, APPLE Amazon) OBJECTS SAMSUNG WEIBO (e.g. cars,
WEBSITES smartphones) TEMPORARY (e.g. Facebook,
LONG TERM WeChat, FACEBOOKAmazon) AMAZON TEMPORARY GOVERNMENT WORK GOOGLE
LONG TERM PAYPAL WORK FINANCIAL INSTITUTIONS START-UPS GOVERNMENT NEW TECH LONG TERM
FINANCIAL INSTITUTIONS START-UPS NECESSARY SHALLOW NEWLUST TECH
FINANCIAL INSTITUTIONS NECESSARY SHALLOW LUST
NECESSARY SHALLOW LUST Tech companies
LOVE DEEP FUNCTIONAL
DEEP LOVE APPLE FUNCTIONAL SAMSUNG WEIBO
FAMILY & FACEBOOK FRIENDS EXPERTS AMAZON
(e.g. doctors TEMPORARY GOOGLEetc) PAYPAL OBJECTS (e.g. cars, WEBSITES smartphones) TEMPORARY (e.g. Facebook, LONG TERM WeChat, Amazon) LONG TERM FINANCIAL INSTITUTIONS WORK
FINANCIAL INSTITUTIONS START-UPS NECESSARYGOVERNMENT LUST SHALLOW NEW TECH
NECESSARY SHALLOW LUST
LOVE DEEP FUNCTIONAL
APPLE SAMSUNG WEIBO
FACEBOOK AMAZON TEMPORARY GOOGLE PAYPAL LONG TERM
FINANCIAL INSTITUTIONS
NECESSARY SHALLOW LUST HSBC TRUST IN TECHNOLOGY
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How security fears undermine trust
uilding trust in technology pension advice. If scepticism can’t be takes time. It requires cured, these benefits will go unrealised. familiarity with a product, It’s easy to see why security is and repeated results. As such a big worry. The explosion in the understanding grows, malware and hackers is a fact of Btrust builds. The process can be life on the internet. The UK National fragile in the early days. The research Cyber Security Centre annual review examined why so many technologies remarked, “The past year has been are struggling to get through an initial punctuated by cyber attacks on a scale period. Respondents were asked to and boldness not seen before. This rank worries in life, and the top-rated included the largest recorded cyber concerns were “personal data being heist, the largest DDoS attack and leaked” (56%) followed by “bank the biggest data breach ever being account hacking” (55%) and “debit revealed.” or credit card cloning” (54%). These The Cisco 2017 Cyber Security outrank a fear of serious illness or report that spam accounts for 65 per being burgled. In finance, security of cent of all email volume, and up to finances, and security of personal data, 10 per cent of spam could be classed are both rated by 87% as essential as malicious. Nearly a quarter of or important for banks to offer. This companies surveyed suffered an attack suggests that security and privacy are and lost business in 2016. Four in ten critical issues and could be preventing a said those losses were substantial. higher adoption of devices. One in five lost customers due to The issue needs addressing. an attack. Industries including financial services News like this filters down to are working hard to produce new consumers. Combined with stories services and security measures which around corporate data breaches, enhance the lives of customers. Lower- and personal anecdotes of bad income consumers in particular will experiences, it’s easy to see why so enjoy advanced services delivered by more respondents worried about data technology, such as investment and security than crime. HSBC TRUST IN TECHNOLOGY
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How to address security voice and facial recognition trusted Increasing confidence in security by under one in four. Even fingerprint means addressing upgrading software recognition, which is now a standard and hardware to meet the challenge. feature on smartphones, is supported The industry will claim that’s being by a little under half of respondents. achieved. The number of vulnerabilities These results are at odds with the for hackers to exploit fell in 2016. security industry which regards Two-thirds of IT security professionals biometric as a long-term solution to said they rated their security as very or identification. extremely effective. Sophos anti-virus A common worry with biometrics principal research scientist Chester is a breach of the central database. If Wisniewski says, “Practice good cyber- there’s a leak of biometric data, the hygiene and you shouldn’t get too theory runs, the system would be worked up. Business as usual.” invalidated. The problem is that consumers This is a fundamental often aren’t always taking the right misunderstanding of the authentication precautions. In the survey only 33% process, says Jason Chaikin, said they always protect their devices president of Beijing-based Vkansee, a with up to date security software. Only manufacturer of ultra-high resolution one in three always uses different optical fingerprint scanners. passwords for different banking “Tokenisation means there’s no products – in breach of guidelines. database to hack. Your fingerprint stays Worse, they often don’t know what on your phone, and my fingerprints on to do. An Instagram photo posted by my phone. It’s not even the fingerprint, Facebook founder Mark Zuckerberg it’s a template, and it’s stored in a in 2016 revealed his laptop had tape secure zone. For Apple it’s called the over the webcam and microphone. A Secure Enclave, and on the Qualcomm necessary precaution? The former FBI platform it’s called the TrustZone. Even director James Comey admitted he if you got this you wouldn’t be able to did something similar: “I put a piece print out a fingerprint and try and touch of tape over the camera because I saw it to a sensor.” somebody smarter than I am had a This concept needs to be explained, piece of tape over their camera.” if the benefits of biometric security are This is candid, and cuts to the heart to be realised. of the problem. Technology can be For additional reassurance, the brutally hard to understand. Even an results of biometrics are being expert can struggle. reinforced by multi-factor security. The solution is to make life easier Multi-factor means two or more for consumers. Optimum security security systems are used together. settings should be installed by default. For example, a text message can be User interfaces must be intuitive. This sent to the user’s phone with a one- is illustrated by the green browser time entry code to confirm possession padlock displayed on browser address of the device. Our survey shows 46% bars. The padlock assures the user the of Chinese respondents use third-party connection is encrypted, and address authentication to confirm their identity. displayed is genuine. “Consumers need to be taught about multi-factor security,” says Better information can Professor Kevin Curran, a senior cure concerns member of the international IT body Education has a key role to play. In the IEEE. “My mother got a text message survey, biometric security polled low to login to Facebook, and she thought levels of trust, with iris recognition it was a scam. What percentage of trusted by one in five respondents to consumers know about it?” replace passwords in the future, and The ideal multi-factor system takes HSBC TRUST IN TECHNOLOGY
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affected. Fitness trackers and health bangles have the ability to improve health outcomes. A survey by health information website Healthline found 80% of fitness wearable device keeps owners motivated to stick to an exercise routine. If used responsibly, retailers can use wearables to provide tailor made offers and coupons. The potential is only just being explored. However, privacy is hitting adoption. A report by PWC on wearables found privacy was the biggest concern: “No one wants their personal data compromised and very few are interested in having it shared socially. Even among Millennials, only 14% of consumers were willing to have information about their shopping habits shared with friends and family.” A survey of American and British adults by Rackspace Hosting found 51% cited privacy concerns as a barrier to adoption of wearable technology. If this is addressed the gains could be huge.
The rise of ad-blocking The latest conflict in data security is browser privacy. Consumer concern the initiative away from the users. can be seen in the explosive growth This is the goal of behavioural of ad blockers. These browser analytics. Keyboard typing rhythms, add-ons act as a firewall, stopping voice pitch, mouse movement, walking tracking codes called cookies being gait, and speed of swiping can be distributed. As of December 2016, 615 tracked to create a “digital fingerprint”. million global devices had ad-blocking Swedish company BehavioSec looks installed, a rise of 30% in a year, and at the angle a user holds a phone, how 40% in Asia Pacific. Three-quarters of much of a finger touches the screen, ad-block users say they are prepared to and how quickly fingers move when leave websites which prevent the use What is needed is education, typing. In August 2016, Pentagon CIO of ad-blockers. combined a push by the Terry Halvorsen announced that the US Consumers are only just starting to security industry to develop Department of Defense is moving to realise the extent of the surveillance easy to use tools. iris security supported by behavioural on the web, says Dr Markus Huber analytics. of the St. Pölten University of Applied Darryl West, Chief Information Sciences, who recently co-authored Officer, HSBC, says biometric and the largest study of the effectiveness behavioural analytics offers a step of ad blocking software: “The user change in convenience and security: searches for something sensitive like “My objective when I finish my advice on depression or burn-out, and career in this industry is to eliminate then sees ads on Facebook relating passwords completely.” to what they’ve searched for. They are being spied on.” Worse, he says, The instinct for privacy criminals use online ads to spread A further worry for consumers is malicious code. fear that data is being shared. Our Third-parties can even track a poll shows security of personal data user without any cookies using the is rated as important as security of unique attributes of the computer or finances. smartphone such as browser version, The wearables sector is particularly installed fonts and screen resolution, HSBC TRUST IN TECHNOLOGY
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a method called stateless tracking. combined with a push by the security One study found 94.7% of browsers industry to develop easy to use tools. with both Flash and Java could be If these policies are pursued the identified this way. “Stateless tracking uptake of new technology may be is a really important issue,” says faster than the polling data suggests. Huber. Artificial intelligence is proving the It is possible to block intrusive point. Our survey data says consumers adverts and trackers using browser are reluctant to let an AI offer add-ons such as Ad Blocker Plus, mortgage advice, let alone allow an AI Ghostery, Disconnect and Privacy robot to perform something as delicate Badger. But consumer knowledge of as surgery, according to the our poll. the options is poor, says Huber. Worse, And yet AI is surging in popularity. some solutions are compromised Smart speakers such as Amazon by commercial concerns. “The Echo and Google Home are a smash most popular solution is Ad Block hit, with 33% of our respondents Plus,” says Huber. “It has a bit of owning one. a dodgy business model, where it Tom Bailey, technology expert, whitelists certain ads, making it the says the industry was taken by least effective. Can a reasonable surprise: “If you look at things like consumer be expected to make the Amazon Alexa, a lot of technology right choices? I don’t know. Even some experts believed that consumers of my computer science students would never talk to technology, chose Ad Block Plus, which is the it would just be too weird, but worst option.” He recommends uBlock amazingly it’s happened almost Origin in combination with Ghostery. overnight.” The fact that ad blocking now As technologies come to market numbers in the hundreds of millions with the potential to improve the shows what a big issue this has way we handle money, motivate us become. It may get worse. New to keep fit, and connect us more laws in the United States and closely to the world around us, it United Kingdom potentially allow becomes more imperative than ever the gathering of people’s browsing to promote trust in technology.n history for inspection by a wide variety of public bodies. Internet security journalist Kieran McCarthy wrote, “It is difficult to underestimate the impact that the shift away from data privacy to open season on personal information sales may have...it may result in significant societal changes.” The danger is that legitimate businesses and services are interrupted. Newspaper sites depend on advertisement revenue. Tracking cookies help websites deliver consistent experiences, such as keeping users log-in during multiple visits. A report by analytics firm Optimal predicts ad-blockers could remove revenue worth $12bn by 2020 in the United States alone.
The way forward Add up these complications and it becomes clear why consumers struggle to know what to trust. Even a director of the FBI is unsure. Fortunately, the right technologies exists to deal with the main worries. What is needed is education, HSBC TRUST IN TECHNOLOGY
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The case for robo-advisors
obo-advisors are one of There are pros and cons of the the most exciting new robo-advisors. Critics say the inputs are 1 technologies in financial rigid and struggle to cope with unique Harness the wisdom of services. These consultants situations. Regulation of robo-advisors multiple experts take the form of a web is still developing. But the robo- Rservice. The robo-advisor poses advisors are growing in usage. Talk to a human and you reap the questions to the user, and then In order to increase trust in knowledge of a single person. If you outputs the best course of action robo-advisors it will be necessary are lucky they may be an industry based on the evidence. The process to communicate the advantages veteran with a detailed knowledge of can account for risk appetite, age, they bring. Here are the seven main the subject matter. Or you may land investment goals, awareness of strengths of these digital consultants. a novice still mastering the basics. financial matters, and many other If these ideas can be explained to Robo-advice offers a stark contrast, critical factors just as a professional users it may be possible to accelerate as it can be programmed by not financial advisor would. The service is adoption of this valuable concept. just one expert, but a committee hailed as a way to offer financial advice of experts each contributing their to a broad audience, delivered at their specialist knowledge. The advice is convenience via the web. inspected, reviewed, and tested to Popular fields include pensions, ensure the users receive the highest investment and savings advice. possible quality of advice. All users Our survey set out to establish the access the elite advice of many level of trust in robo-advisors at this outstanding minds. early point in their development. Overall 19% would trust a robo- advisor to help make choices around investments, rising to 38% in India and 4 5 44% in China. There are sceptics. Just Frequent Real time over half (53%) of people would be unlikely or very unlikely to trust a robo- upgrades information advisor that makes recommendations based on AI algorithms. In France only Human consultants need to work A robo-advisor can be plugged 9% would be likely to trust an AI robo- hard to keep up to date with their into market data to match advice advisor, and 6% in Germany. Giving the field. For robo-advisors constant to market changes. For example, robo-advisor a user-friendly make-over improvement, and near unlimited, mortgage deals change frequently, offers no gain – hologram assistants accurate memory is a way of life. with new interest rates, fees have similarly low levels of trust. The programmers can add new and time periods. A robo-advisor functions at will. Users benefit is purpose built to examine the from the moment the changes are full range of market options, and set live. Feedback from clients can adapt advice in real time. Human be incorporated. New legislation consultants may struggle to keep and new products can be rapidly abreast of the information, and integrated. And the robo-advisor often resort to using their own never forgets the new material, or robo-advisor to augment their relapses into obsolete advice. knowledge. HSBC TRUST IN TECHNOLOGY
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2 3 “There is an advice gap in Low cost Friendly user financial services. Unless you experience have a certain amount to invest A major factor in the rise of asking a professional adviser robo-advice is the cost, which Robo-advisors are accessible doesn’t make sense, and that is often under-cuts human from any PC or mobile device. where a robo-advisor can really consultancy fees. This means This makes them convenient for help a big chunk of society. savings for users. It also makes people who live in remote areas, The technology is actually quite financial advice available to or work unsocial hours. The online simple, using ‘if then’ decision a cohort of young and lower- format is an appealing alternative logic. The results are crafted by income consumers who were for anyone too shy to book an our best advisors and consistent previously priced out of the appointment with a human advisor. with the regulatory framework, market (more likely not in a “Reckless conservatism” through so everyone gets a very high position to invest). Since the inactivity is all too common in standard of advice. overheads of providing a robo- financial planning. Furthermore, service differ from a human the user experience can be refined There’s also a category of self- consultation the low cost need over time through multivariate directed people who can benefit not reflect the quality of service. testing – running many versions, from robo-advisors. They can each slightly different - so the be sophisticated traders, but experience improves over time. have not been given the tools necessary to think through their risk appetite and the risks of what they are doing. Tools 6 7 are being developed to help Rebalancing Works together these people. with humans Robo-advisors can help review Investing is an ongoing process. an investment strategy on an Changes must be made to In the early days of robo-advice ongoing basis. Life changes, asset allocation as time passes. it was suggested that humans things happen, and we can give Robo-advisors are formidable would be supplanted by their customers nudges to suggest at this role. They can track silicon rivals. Instead we’ve they should look again at their portfolio values, identify potential seen a happy collaboration arise. investment strategy. Gains like changes, and implement Robo-advisors take the simpler this are why we are so excited whatever strategy they are and more onerous duties, such by robo-advisors.” programmed to follow. Clients as offering early consultation can be prompted to retake the to would-be investors, and Charlie Nunn, HSBC Global questionnaire at regular intervals. answering basic questions. This Head of Wealth Management Ongoing portfolio rebalancing is liberates human counterparts to now seen as a main strength of focus on specialist activities. robo-advisors. HSBC TRUST IN TECHNOLOGY
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Trust at the outer limits of technology
he potential for artificial intelligence to change new markets such as health, energy, transportation and education is only starting to be understood. The next Tgeneration of AI engines will be more powerful and creative than anything we’ve seen to date. They will have the ability to supplement human endeavours in bold new ways, and even challenge human performance in previously closed fields. The arrival of these engines will provoke profound questions. Here are three of the most challenging conundrums. In each case, human users need to assess how far they they trust an AI to complete a task. HSBC TRUST IN TECHNOLOGY
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Case study 1: Would you trust a machine to set you up a on a date over a family member?
s artificial intelligence Fish. Rudder studied mathematics and knockout and the other rather homely becomes more Harvard and became obsessed with - the percent of people giving the sophisticated, the realms looking for patterns in the data. IAC’s dates a positive rating was constant. where human judgement sites offered him 55 million American Attractiveness didn’t matter.” is supreme is shrinking. users – that’s one account for every The same is true in the partner AYet surely there are some fields where two single people in the US. He noted, checklist. Priorities such as religion, the personal touch beats the cold “I could go and look at what actually politics, and smoking are usually rated numerical skills of an AI? happens when, say, 100,000 white men “mandatory”. Yet two oblique questions Dating is a classic case. Can an and 100,000 black women interact in have superior predictive power: Do algorithm beat human judgement in private. The data was sitting right there you like scary movies? and Have you selecting a partner romance? on our servers. It was an irresistible ever travelled alone to another country? Our research says not. A friend is sociological opportunity.” He published Three-quarters of long-term couples trusted by 48% of respondents to the results in Dataclysm: Who we are brought together answered the same find the right person, and over third when we think no one’s looking. way, either yes or no to both. Rudder would trust a family member (37%). Rudder sifted through vast pools notes, “People tend to overemphasize Only 8 per cent trust a humanoid robot of data to identify which traits are the big, splashy things: faith, politics, programmed by experts in relationships. important. Take looks. Attractive and certainly looks, but they don’t Could we get respondents to people are in demand. They get matter nearly as much as everyone think again? In fact we can do a deep disproportionate attention, receiving thinks. Sometimes they don’t matter analysis of the machine’s chances. The vastly more messages and getting at all.” popularity of internet dating means a higher reply rate to their own The data is clear: we don’t know we have vast reservoirs of data to messages. what we want and what is important draw from, and the findings are truly Yet when OK Cupid ran a “blind in a partner. A machine can correct for surprising. They tell us about the power date” scheme, withholding images this. If a family member is picking a of machines to guide our lives, even to and using only a compatibility score date by listening to your priorities, the tell us about our unconscious desires. to create matches, satisfaction rates chances of a good match are lower. Christian Rudder is a pioneer of soared. Looks were irrelevant. Rudder The message stretches beyond internet dating. He founded dating site said, “No matter which person was dating. Machines can use the power OK Cupid, now owned by IAC, which better-looking or by how much - even of big data to draw insights into our also runs Match.com and Plenty of in cases where one blind-dater was a desires that even we are blind to.n HSBC TRUST IN TECHNOLOGY
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Case study 2: Who should an autonomous vehicle protect?
achine ethics was once the road,” saving millions of lives questions involving an autonomous the preserve of science worldwide. But from time to time vehicle (AV). The results were fiction writers like Isaac an AV will crash. Which raises the published in Science magazine in Asimov with his three question – if someone’s going to June 2016. laws of Robotics. Now suffer, should it be the passenger or a The mainstream view is that the Mthe question is real. Manufacturers pedestrian? How about ten pedestrians AV should protect as many lives as are grappling with what moral code versus one passenger? possible. In one example the choice to install. Jean-François Bonnefon at the was 10 pedestrians versus one The leading realm is autonomous Toulouse School of Economics passenger. A decisive 76 per cent vehicles during a crash scenario. In partnered with MIT computer scientist of participants voted for the AV to theory driverless cars should be a Iyad Rahwan to find answers by sacrifice the lone passenger and save lot safer than human drivers. The US crowdsourcing. His team conducted the ten pedestrians. highways chief talks about “a world six online surveys using the Amazon As the ratio of pedestrians to where we could potentially prevent Mechanical Turk platform. A total of passenger falls, so did approval for or mitigate 19 out of 20 crashes on 1,928 participants answered moral sacrificing the passenger. When one HSBC TRUST IN TECHNOLOGY
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passenger faced one pedestrian, only 23 per cent thought it moral for the car Isaac Asimov’s Three Laws of Robotics to sacrifice the passenger. Then the academics asked separate question. How likely are you to buy Science fiction writer Isaac Asimov a car programmed to act ethically? wrote more than 500 books and is Or would you prefer a selfish AV know as one of the most perceptive which protects you? The researchers explorers of the shape future observed “even though participants technology might take. He devised still agreed that utilitarian AVs were the this three laws in the 1942 short most moral, they preferred the self- story Runaround. They are regarded protective model for themselves”. as the prototypes for writing an Government regulation might fix ethical code for machines. this selfish tendency, but the survey reveals intervention has negative consequences. “Our findings suggest that regulation for AVs maybe necessary but also counterproductive”, concluded the report. “First, most A robot must protect its own existence as long as people seem to disapprove of a such protection does not regulation that would enforce utilitarian conflict with the First or A robot may not injure a AVs. Second - and a more serious Second Law. human being or, through problem - our results suggest that such inaction, allow a human regulation could substantially delay the being to come to harm. adoption of AVs, which means that the lives saved by making AVs utilitarian may be outnumbered by the deaths caused by delaying the adoption of AVs altogether.” The question of whether a user can 3 1 halt an AI if needed is also pertinent. AI house DeepMind, which became famous for beating an elite player of the Chinese boardgame Go using a self-taught AI called AlphaGo, published a paper calling for a “big red button” to allow an AI to be switched 2 off in case of an emergency. The authors explain that AI agents are “unlikely to behave optimally all the time.” They conclude, “If such an 0 agent is operating in real-time under A robot must obey orders human supervision, now and then given it by human beings Asimov also added a fourth, or it may be necessary for a human except where such orders zeroth law, to precede the others: operator to press the big red button would conflict with the First Law. to prevent the agent from continuing 0. A robot may not harm a harmful sequence of actions - humanity, or, by inaction, allow harmful either for the agent or for the humanity to come to harm. environment - and lead the agent into a safer situation.”n HSBC TRUST IN TECHNOLOGY
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Case study 3: How much should we use nudge technology to improve behaviour?
conomists Dick Thaler and designed with one thing in mind: to marketing at New York University’s Cass Sunstein invented keep gamblers gambling. Clocks are Stern School of Business, has nudge theory, and the removed, daylight eliminated, and examined this in a new work called pair are brimming with the games are fined tuned to keep Irresistible: The rise of addictive examples of how effective rewards unpredictable. The result a technology. He warned, “As an Eit can be. In their book Nudge they twilight world that’s impossible for experience evolves, it becomes an describe a pension scheme which some people to leave behind. irresistible, weaponized version”. harnesses the concept of “loss The minds behind casino design Consumers are aware of the aversion” - the idea that consumers are now refining websites and potential of nudge theory. Our hate losing something more than apps to maximise engagement. survey shows 88% expect nudges in they enjoy the gains. Loss aversion Adam Alter, Associate Professor of financial behaviour to be powered by explains why pension contributions are lower than they should be. The pair created a pension plan in which no contributions are made until a pay rise. Then a percentage is paid in. The saver therefore never sees a reduction in income. The idea was a triumph. Contributions rose 200 per cent. Nudge theory often works without participants noticing. The pair cite a school which wanted to promote healthy eating. Without changing the menus, the food display was changed and the layout re-arranged. This approach altered the consumption of food items by 25 per cent. When used effectively a nudge can produce net benefits. An app called SmartSave developed with a FinTech company called Pariti helps increase the amount people save. The app can be linked to any account, and automatically diverts money into a savings account according to user-defined rules. For example, purchases resulting in a few pennies over or under a round pound results in the change going to the savings account. No action required. It prompts users when it’s “safe to save”. As a result, money accumulates in the savings account without effort. The question is, how far should the concept go? Nudge theorists are so good that behaviour can be manipulated to extreme degrees. Casinos are HSBC TRUST IN TECHNOLOGY
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AI engines within 5 years. income workers getting harder Sunstein states, “Certainly Does that mean there’s an open nudges than the well off? And the choice architects should be license for nudging? The author issue of incentives – who is really focused on the welfare of choosers, of the theory isn’t too sure. Cass benefiting? rather than their own”. He notes Sunstein published a follow up work Qatar, the UK, Australia, and the extreme sensitivity to issues called The Ethics of Influence looking Germany have nudge units. The of manipulation, particularly in at the dangers of over-use. He raises potential for good outcomes is huge. nations with a history of poor the issue of consent. There the The question is, should consumers human rights. Nudge theory is a question of responsiveness - stress always consent to nudges? The potent tool. But if used to excess can make people more reactive balance between paternalism and then the good it can do may to nudging. Might it lead to lower- manipulation is hard to strike. be curtailed.n
Definitions
Algorithm Weak AI An algorithm is a series of sequential The artificial intelligence of today is task- steps, like a recipe in a cook book. specific. It can tackle well defined tasks. A When the steps are followed an translation bot can translate and a medical outcome is achieved, and the algorithm algorithm can interpret and X-Ray, but two can begin again. Simple algorithms are can’t swap jobs. Sophisticated AI engines used to tackle tasks such as routing such as IBM Watson, Wipro Holmes, engineers to jobs in the shortest Salesforce Einstein, and Ipsoft Amelia, possible distance, and pricing airline are collections of task-specific AI faculties tickets dynamically. Artificial intelligence operating under a single umbrella to provide is built on algorithms. the appearance of general intelligence.
Machine learning Strong AI An AI engine can be endowed with the In time the power of AIs will grow to ability to learn beyond its programming. match the versatility of humans. They Machine learning happens when an AI will operate across fields, and be able to engine sifts through data to discover tackle challenges beyond their immediate new patterns, and builds a knowledge programming. Also called strong AI, there base on its own initiative. It’s similar to is considerable debate as to how it will be the way the human brain works. The possible to determine the arrival of Strong, concept allows machines to operate or General, AI. Apple co-founder Steve beyond the bounds of human tuition. Wozniak invented the Coffee Test to identify DeepMind’s engine AlphaGo learned the a Strong AI, in which a machine must go into boardgame Go using machine learning. an American home and figure out how to When it mastered the basics, AlphaGo make coffee. The next stage of Sentient AI, was replicated, and the engine played in which an artificial mind truly experiences other instances of itself to improve to sound and colour, rather than merely world-class strength. processing data, is a potential variation of General AI, though there is no agreed methodology for identifying such a machine. HSBC TRUST IN TECHNOLOGY
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H2M versus H2H How machine interactions differ from human relationships HSBC TRUST IN TECHNOLOGY
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trong user experience (UX) at any given moment. Human to design is vital in winning the human interaction offers helpful trust of users. To do that it clues of impending malfunction, is necessary to unpick the such as sweating, voice intonation, logic of human to machine and posture. Sinteraction to identify concerns. How Solution: Incorporate status does H2H differ from H2M? The indicators. For example, aeroplanes differences start with the physical include low-fuel alarms, and Siemens’ presence of a human. The human latest H-Class gas turbines are face is expressive, communicating fitted with 1,500 sensors to warn all sorts of nuanced information. engineers when performance is Web interfaces and robots offer less falling below optimal. information – no smiling, frowning, or blushing. Then there’s the distinct Where are you? nature of human intelligence, in which It’s important to know who we information from many different are talking to, and where they are fields can be pulled together at will. located. Data protection rules mean Machines are task specific, for now this information must be conveyed. at least. Websites tend to obfuscate this A good user experience can information. Time can also be unclear anticipate the needs of users, and – when was a webpage written? The correct for shortcoming in the information might be ten years out machine. If done well, the user may of date. start to feel there is little a human Solution: Make it clear when can offer over a machine. data is being transmitted and stored Here are some of the key internationally. Date stamp information. differences, together with potential solutions. Unclear qualifications Doctors and lawyers display Common sense professional certificates on the practice Dutch tourist Milan Schipper recently wall. It helps clients confirm they ended up in the wrong Sydney after hold the right exams. Technology can booking his flight online. Mr Schipper withhold important information such as accidentally booked a ticket to Sydney, the qualification of programmers and Nova Scotia, and only realised when authors to provide advice. he arrived in Toronto: “The plane was Solution: Financial services providers really small and so I figured, would that and other skilled professions should make it to Australia?” Amusingly he cite regulatory compliance and, where met a woman from the US in the same appropriate, expertise. A leading predicament. It’s a classic example of medical organisation, the Mayo Clinic, lack of common sense in machines. A offers online advice accompanied with human would most likely have checked the biographies of the writers. which Sydney he meant. Solution: Common sense is Intrusive upgrades increasingly programmable. Machine A source of mistrust in technology learning tracks common behaviour is questionable upgrades. An app and flags unusual activity - now can develop new and unwelcome proving a major asset in the fight characteristics. For example, it has against fraud. been known for apps to activate Early warning signs are absent. Bluetooth, GPS and microphone A computer crash comes as a functions to gather data on user shock. There’s rarely a warning sign, activity – something not specified in just a sudden switch to a blue screen the original release version. or error sign. As a result users struggle Solution: A code of practice to estimate the reliability of a system should forbid invasive upgrades. HSBC TRUST IN TECHNOLOGY
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May I see the manager? Consequences of an error Get served bad food in a restaurant and A rogue employee acting in an it’s easy to ask for redress. By contrast unacceptable manner can be isolated, technology can often be a closed blamed and removed. An error in environment, with no obvious route of technology can’t be handled so recourse when things go wrong. Our efficiently. Users tend to regard survey showed 74% of respondents technology as representative of the believe it is essential or very important brand. The blame game offers no customers can know where to go when reassurance. As a result standards things go wrong. must be higher for technology. Solution: List support options, such as Solution: Develop reliability email, online chat, and phone numbers. parameters. Impose service level requirements appropriate for Digital answers for analogue the context. problems The human vocabulary is blessed Tailor-made advice with myriad qualifiers, intensifiers An experienced human advisor adapts and equivocations to offer nuance to their thinking to the client. In this statements: “I think...it might be the way a sophisticated client can be case...I’m almost certain.” Crude UX given high levels of information, and a programming can strip out this useful first-time applicant offered simplified information, and present answers with material. All too often machines a misleading sense of reliability. For deliver the same service to all users. example, online journey planners state At most there is an “advanced” or the driving time from Florence to Pisa “basic” menu, although toggling is 71 minutes, but never with a degree between them is sometimes a skill of probability. in itself. Solution: UX designers need to Solution: Machines should identify incorporate reliability indicators where the knowledge of the user, and needed. adapt fluidly.n HSBC TRUST IN TECHNOLOGY
31 Conclusion The path to high trust
Trust is a critical concept in the adoption such as ISO 27001 and 27002 are 5 of new technology. High trust means useful technical protocols, but are not Regulation, including early adopters are prepared to play with seen as useful guides by the general transparent algorithms new concepts. Breakthrough ideas public. Kitemarks are a simple way The poll shows emphatic support for get trialled and validated. In financial to display compliance with official independent regulation, with 75% services, high trust means banks can standards. Progress is already being believing it is important when banks roll-out new services which improve made by organisations such as the introduce a new technology. This tallies lives and open new opportunities. It’s GSMA, and the Internet of Things with other sectoral surveys, such as a virtuous circle. High trust means Security Foundation. Kitemarks elevate the IOActive poll of IT professions consumers adopt better security tools standards, as demonstrated by the showing 83% support. Regulation like biometric identification, leading to UK’s government’s Cyber Essentials needs bite. The European Union’s fewer breaches. Low trust suppresses programme which issues a certification General Data Protection Regulation innovation. Great ideas are ignored. logo to organisations meeting security will offer greater guarantees when it Co-operation is slowed. Costs rise. standards. The goal should be to comes into force in 2018, but appears This report shows there is a need provide an intuitive set of symbols to to have omitted rights in certain to focus on improving trust, and offers guarantee minimum levels of security areas, such as the right to explanation insights into what can be done. and performance. of decisions made by automated Here are the five essential lessons decision-making systems. A report by for policy makers and brands. 3 Sandra Wachter, Brent Mittelstadt, Simplified interfaces and Luciano Floridi, a research team 1 User behaviour is to a large part at the Alan Turing Institute in London Invest in education dictated by the structure of the user and the University of Oxford, calls for There is always a gap between interface. If good choices are easy an independent watchdog to police technology and public awareness, to find and select, and poor choices AI, and offer redress for people who and education is the key to are excluded or hard to find, then it is believe they have been discriminated minimising this gap. Great work is possible to increase performance and against. There is a strong case to currently being done. Google India trust. Interfaces should be standardised examine the need for transparency is working on educating the public whenever possible. For example, the in algorithms and AIs used in public on safe internet browsing. The FIDO internet browser green browser padlock contexts. Alliance is promoting understanding makes it simple to see if a connection of tokenisation in the biometric is encrypted and the address bar Final thoughts industry – essential if consumers genuine, but the green bar is displayed These measures directly address are to understand there’s no central differently on each browser, leading to the trust deficit. The impact could database to be hacked. Technology unnecessary confusion. be significant. The world is at risk of can play a role. CybSafe is a start-up creating distinct classes of technology using behavioural analytics to identify 4 users, with less-able users increasingly worker’s areas of vulnerability, tailoring Accelerate biometric and left behind. tuition to cover their specific needs. behavioural security A few thoughtful steps, like Even small gestures can help. Our The trade-off between convenience promoting biometric security and survey showed trust in biometrics and security is not a constant one. It developing simplified interfaces, can rises 6 percentage points after a short is possible to enhance security whilst spread the benefits of technology to briefing. The march of technology is minimising annoyances for users. the widest possible number of people. remorseless. Education will ensure no Biometric security offers a clear way Education can help even novices one is left behind. to speed up authentication whilst get involved. reducing inconvenience. Behavioural This is more than economic 2 analytics is a complimentary prudence. The human race is moving Kitemarking technology, typically working without into an era where technology shapes The complexity of technology means the consumer needing to do anything our lives. It’s a journey we should be consumers and businesses need a at all following enrolment. Multifactor taking together, so we can create a straightforward guide on what to trust. security should be promoted where world in which we all benefit from the International cyber security standards high-level security is needed. fruits of innovation. HSBC TRUST IN TECHNOLOGY
32
Sources
How security fears undermine trust
Wearables www.pwc.com/us/en/technology/publications/assets/pwc-wearable-tech-design-oct-8th.pdf
Rackspace blog.rackspace.com/uk/category/newsroom
Healthline www.healthline.com/health-news/consumers-concerned-about-privacy-personal-health-data-wearables-mobile-apps-072815
Kieran McCarthy www.theregister.co.uk/2017/03/28/congress_approves_sale_of_internet_histories/
Ad Blocking revenue lost. www.theguardian.com/media/2016/may/17/adblockers-us-growth-remove-12bn-advertising-2020
The case for robo-advisors
The social dilemma of autonomous vehicles by Jean-François Bonnefon, Azim Shariff, Iyad Rahwan www.propublica.org/article/how-we-analyzed-the-compas-recidivism-algorithm www.propublica.org/article/machine-bias-risk-assessments-in-criminal-sentencing www.washingtonpost.com/news/wonk/wp/2016/08/18/why-a-computer-program-that-judges-rely-on-around-the-country-was-accused-of-racism/?utm_term=.508be009b4a2
Vanity Fair article for Elon Musk quotes www.vanityfair.com/news/2017/03/elon-musk-billion-dollar-crusade-to-stop-ai-space-x
H2M versus H2H: How machine interactions differ from human relationships www.siemens.com/innovation/en/home/pictures-of-the-future/industry-and-automation/Remote-Services-Early-Warning- Systems-for-Turbines-and-Tomographs.html www.theguardian.com/world/2017/mar/31/teen-accidentally-flies-to-sydney-nova-scotia-australia
Mayo Clinic www.mayoclinic.org/about-this-site/meet-our-medical-editors
Rik Ferguson twitter.com/rik_ferguson/status/854979511498289152
Interviewees
Brian Lord, former deputy director of GCHQ, now managing director of PGI Cyber
Daniel Hulme, founder and chief executive of Satalia.com
Jason Chaikin, president of Vkansee
Dr Markus Huber, of St. Pölten University of Applied Sciences
Professor Kevin Curran, senior member of the IEEE
Chet Wisniewski, principal researcher of Sophos
Ken Munro, director of Pen Test Partners
Alice Thwaite, founder of the Echo Chamber Club
Expert panel
Devie Mohan, FinTech Expert
Julian Ranger, Technology and Privacy Expert
Will Higham, Cultural Trends Expert
Tom Bailey, Technology Trends Expert
Chris Gledhill, FinTech Influencer
This report has been written independently for HSBC. The information and / or opinions provided do not necessarily constitute HSBC’s view.
The study represents the views of 12,019 people from 11 countries and territories: Canada, China, France, Germany, Hong Kong, India, Mexico, Singapore, The United Arab Emirates, UK, and the US.
Populus conducted the qualitative research in March and April with 66 members of an online community, including six members from each of the 11 nations in question. All respondents answered all questions and their contributions have been made available separately for use in the media. Populus also consulted twice with a panel of experts to research in-depth opinions and expertise on the topic.
Ipsos MORI conducted quantitative research with over 12,000 participants in total. 2,000 of those participants were from the UK and 1,000 participants came from each of the remaining countries. The quantitative findings are based on a nationally representative survey of people of aged 18 and over in each country, and the research was conducted in March/April 2017. Information and/ or opinions provided within this report constitute research information only and do not constitute an offer to sell, or solicitation of an offer to buy any financial services and/or products, or any advice or recommendation with respect to such financial services and/or products.